The Lamacchia Monthly Housing Report highlights home sale statistics, average sales prices, the number of homes listed and pending as well as price changes for single-families, condos, and multi-family homes in Massachusetts. For New Hampshire, it presents home sale statistics and average sales prices. These factors, when compared year over year, are all indicators for predicting future trends in the market.
- As the Fed continues to combat the high levels of inflation currently present in the economy, mortgage interest rates have fluctuated as a result, jumping around from just above 5% to just below 6% during the month of July.
- The initial rate spike in late May suddenly slowed the market down and impacted buyer affordability. As a result, the number of closed sales for July was negatively impacted. Now that rates are hovering more consistently in the 5% range, motivated buyers are more comfortable moving forward with what they can afford, so August sales may not be down as much.
- Increased interest rates coupled with high inflation has diminished buyer affordability, not only when budgeting for a home, but for every other purchase or debt obligation as well. Many buyers have dropped out of the market to ‘wait for rates to come down’ or because their budgets can no longer accommodate the purchase of a home.
- Important to note that, even though there is a lessening of demand, this does not translate to cheaper housing. Inventory levels, although rising, are still too low to drive prices down (i.e., supply is too low). However, as more inventory gets added to the market, the rate at which prices have been rising is expected to slow as the year continues.
- Buyers, there is a cost to waiting! Mortgage rates are expected to increase especially as we head towards Fall. The rental market has also only become more saturated and competitive in this market shift, meaning rent is up and will continue to go up. Additionally, with less buyers in the market, buyers will now be awarded a much-needed reprieve from the intense competition they have been experiencing.
- Sellers, remain realistic and reasonable. Now that mortgage rates have increased, buyers cannot afford the same as they could at the beginning of the year. Knowing this, pricing your home right will be the best and only way to remain competitive in this market to get your home sold quickly and for the most money.
- Overall, the market is moving out of its frenzied state back into the type of market we saw before the pandemic – which is still a hot market! Buyers and sellers alike need to stay informed and prepared to make sure they can be successful and achieve their home buying or selling goals in this market. Anthony recaps the market data for the first half of 2022 and gives his predictions for the rest of the year here.
Massachusetts Home Sales Down 19.8%
Sales are down 19.8% year over year, with July 2022 at 8,150 over 10,160 last July. Sales are down across all categories.
- Single families: 6,327 (2021) | 5,266 (2022)
- Condominiums: 2,897 (2021) | 2,201 (2022)
- Multi-families: 936 (2021) | 683 (2022)
Average prices have continued their rise with another year-over-year increase of 10.5%, now at $636,741. Prices increased in every category.
- Single families: $650,704 (2021) | $730,631 (2022)
- Condominiums: $443,076 (2021) | $475,862 (2022)
- Multi-families: $616,804 (2021) | $670,490 (2022)
Homes Listed For Sale:
As the market continues its cooldown, sales have remained down month over month as sellers aren’t as motivated to list as they were during the market boom last summer – evidenced by the fact that there were 12.8% fewer listings this year compared to last July 2021. Fewer listings will also impact pending sales numbers next month.
- 2022: 8,327
- 2021: 9,553
- 2020: 10,406
Pending Home Sales:
The number of homes placed under contract is down by 14.9% when compared to July 2021. Elevated rates have lessened demand in the market meaning that closed sales next month could also be down as contracts accepted correlates to future closed sales.
- 2022: 7,166
- 2021: 8,418
- 2020: 10,312
Price reductions increased by 18% year over year. In this changing market, demand is lessening, meaning sellers must price their home right to remain competitive in this market. If you are a seller whose home has been sitting on the market despite being marketed properly, the price is the first thing to consider adjusting.
- 2022: 801
- 2021: 679
- 2020: 739
Although this doesn’t seem like a significant number of price reductions overall, you can see in the graphic below that compared to the available inventory, it is a more significant increase.
New Hampshire Home Sales Down 18.9%
- The deceleration of sales in NH demonstrates that the market is cooling and is expected to continue to do so as we finish out the summer, so buyers and sellers need to stay informed and prepared to take advantage of this market.
- Prices are expected to continue to rise as the year goes on, but not at the rapid pace we have seen in previous months. Even with demand lowered, housing prices will not collapse because there is not nearly enough inventory to create this type of scenario. However, inventory levels are slowly increasing, which will act in slowing price appreciation.
- Mortgage rates remain between 5% and 6%, keeping buyer affordability and demand down as some buyers are still unwilling to stay in the housing market at these rates. Less demand does mean less competition for motivated buyers who stay in the market which is a great thing.
- Sellers, there are a handful of mistakes to avoid when selling your home, with overpricing being the most important one to avoid in this cooled-off market if you want your home sold quickly and for the most money!
Single family, condo home sales, and multi-family home sales have all decreased when compared to July 2021.
- Single families: 1,781 (2021) | 1,478 (2022)
- Condominiums: 490 (2021) | 400 (2022)
- Multi-families: 151 (2021) | 86 (2022)
Prices overall have continued to increase, now up 14.2% to $498,504 compared to July 2021. Prices increased in every category.
- Single families: $473,221 (2021) | $530,509 (2022)
- Condominiums: $332,321 (2021) | $386,534 (2022)
- Multi-families: $339,825 (2021) | $469,259 (2022)
The market is adjusting to a pre-COVID market without stimulus without artificially low mortgage rates and stimulus. We expect it to be a busy summer, but not quite as busy as the last two summers.
Data provided by Warren Group & MLSPin for MA, and by NEREN for NH then compared to the prior year.